Johannesburg, South Africa, December 13, 2023 — To boost clean electricity generation and support sustainable development in Africa, IFC today signed a $100 million financing package for Release by Scatec (Release), a company that provides innovative, pre-assembled, modular solar PV power containers and battery storage solutions.
At present, the power supply in Cameroon is erratic, with a connection rate of 65 percent while in Chad, only 11 percent of the population has access to electricity. In addition, users pay high tariffs, and the industry has a large carbon footprint, being powered almost entirely by fossil fuels. The financing package is part of a wider partnership and will help meet growing electricity demand with a cost-competitive, reliable, renewable solution to African utilities and will start by adding 35 MW and 36 MW of power to the national grids in Chad and Cameroon, respectively. It will reduce overall carbon emission reductions by 62,200 tons per annum – the equivalent of the energy consumption of about 40 300 European households every year.
The loan comprises $50 million senior debt from IFC's own account and $50 million in blended finance. The blended finance package includes $25 million from the Canada-IFC Renewable Energy Program for Africa, $15 million from the Finland-IFC Blended Finance for Climate Program, $5 million from the Canada-IFC Blended Climate Finance Program and $5 million from the International Development Association's Private Sector Window (IDA PSW) Blended Finance Facility. In addition, the IDA PSW Risk Mitigation Facility IFC will also provide an up to $65 million Liquidity Support Guarantee, of which a portion will be used for the first sub-project, which will be rolled out in Chad.
"We are excited to secure this partnership with IFC for our innovative solar leasing solution Release," said Terje Pilskog, chairperson of Release. "IFC's support is testimony to the solid business model of Release, the general demand and need for such an innovative solution in the market and our proven track record in developing renewable energy solutions."
"I am delighted that, through this partnership between SCATEC and IFC, Chad has been chosen as one of the first countries to benefit from a solar power plant to support the government's efforts to meet the energy access needs of our populations," said Alixe Naïmbaye, Minister of Hydrocarbons and Energy of Chad. "In addition, the liquidity guarantee facility granted by the World Bank to Société Nationale d'Electricité underlines the World Bank Group's strong commitment to facilitating partnerships with private investors."
"This highly innovative solution enables countries to deploy solar power projects quickly, allowing African countries to swiftly ramp up to meet rising energy demand with clean power solutions," said Sarvesh Suri, IFC's Regional Industry Director for Infrastructure and Natural Resources. "Our ambition is to deploy this replicable solution, in partnership with Release, across multiple countries in sub-Saharan Africa within a short timeframe."
Release is majority-owned by power producer SCATEC ASA. Having partnered with SCATEC since 2020, IFC co-developed the Release platform to pilot, test and commercialize a flexible renewable energy leasing business model across multiple utilities in Africa.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2023, IFC committed a record $43.7 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises. For more information, visit www.ifc.org
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About the IDA Private Sector Window
The International Development Association's (IDA) Private Sector Window was launched in 2017 to catalyze private sector investment in the poorest and most fragile countries. Recognizing the key role of the private sector in achieving IDA's objectives and the World Bank Group's twin goals, the window provides a source of co-investment funding and guarantees to de-risk private investments supported by IFC and the Multilateral Investment Guarantee Agency (MIGA). The IDA PSW is an option when there is no commercial solution, and the World Bank Group's other tools and approaches are insufficient: http://ida.worldbank.org/psw.
About the Canada-IFC Renewable Energy for Africa Program
The Canada-IFC Renewable Energy Program for Africa promotes private sector financing for renewable energy projects in Sub-Saharan Africa as a means to improve access to affordable and sustainable energy services that can play an important role in reducing poverty, reducing gender inequality, and tackling climate change. Canada has committed $150 million Canadian dollars to this climate program to structure blended finance solutions that enable high-impact energy projects in Sub-Saharan Africa. The program is part of Canada's support for the Africa Renewable Energy Initiative: http://www.arei.org/
Finland-IFC Blended Finance for Climate Program
The Finland-IFC Blended Finance for Climate Program (BFCP) seeks to catalyze innovative investments and unlock private financing into climate-smart projects in low-income developing countries, creating markets and opportunities for the private sector. The Program covers multiple geographies, sectors, and business models, including investments in renewable energy (including distributed/captive energy solution), energy efficiency, green buildings, climate-smart agriculture, and forestry, among others.
Canada-IFC Blended Climate Finance Program
The Canada-IFC Blended Climate Finance Program aims to mobilize private capital for global climate action and reflects Canada's commitment under the 2015 Paris Agreement to support developing countries in their transition to sustainable and resilient low-carbon economies. For more information on Canada's investment in global climate change action, visit Canada's climate finance for developing countries (international.gc.ca).
